open market operations

The bond market, which got a shot in the arm on Friday after Moody`s upgraded India`s sovereign rating pared almost all the gains on that day, resumed the rally on Monday boosted by the cancellation of OMO sale which to traders was a signal that the central bank was not happy with high yields.

The Reserve Bank's open market operations are not primarily aimed at meeting short-term liquidity needs, but to manage long-term balance-sheet growth in line with the inflation target, Governor Raguram Rajan said Tuesday.

The Reserve Bank of India's liquidity management activity is not related to exchange rate movements and neither is the rupee movement directly related to open market operations, said a senior official Wednesday.

Liquidity condition is quite comfortable as of now and the central bank is open to conduct more open market operations (OMOs) or reduce the cash reserve requirements (CRR) further in the case of a liquidity shortage in the future, it said on Tuesday.